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Old 07-30-2011, 01:10 PM
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K-1 line 11 code A & B

Final K-1 for a family member's estate. It notes 3500 under code A (excess deductions) under line 11 and 66,000 under code B (short-term capital loss carryover) under line 11. I was told that the taxes would be paid by the estate on the money I received from the estate. This didn't sound right so i'm curious what to expect come tax time. Any input would be appreciated.



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Old 07-31-2011, 06:03 AM
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“Final K-1 for a family member's estate. It notes 3500 under code A (excess deductions) under line 11 and 66,000 under code B (short-term capital loss carryover) under line 11. I was told that the taxes would be paid by the estate on the money I received from the estate. This didn't sound right so i'm curious what to expect come tax time.”---> Estates and trusts which file Form 1041 Income Tax Return for Estates and Trusts, are required to send Schedule K-1 to beneficiaries to report distributions of income during the year; A 1041 form is an income tax reporting form that an estate files. The IRS requires the estate manager to file this form each year. The income passes through directly to the beneficiaries so the estate does NOT pay any taxes itself( Most estates -- more than 99% -- don't. The federal government imposes estate tax at a person's death only if the taxable estate is worth more than $5 million. , but the trust or estate still has to file an income tax return).The various types of income from these entities are to be reported on your individual income tax return on 1040 on specific lines and in specific schedules.You need to report your share of investment as shown on the Schedule K-1 on your individual tax return; you should report Short term capital loss carryuover on Line 11( under Code B) of Schedule K-1 on 1040 Sch D line 16 report the smaller ofThe loss on line 16 or ($3,000), or if married filing separately, ($1,500) on Form 1040, line 13. Also the amount $3,500 on Sch K-1 of 1041 line 11 with code A needs to be reported on Sch A of 1040 line 23 , Other expenses—investment, safe deposit box, etc. List type and amount; if you do not itemize deductions on Sch A , then you can’t deduct it from your AGI. Excess deductions on termination occur only during the last tax year of the estate when the total deductions (excluding the charitable deduction and exemption) are greater than the gross income during that tax year. If there is an estate tax deduction, include it in the taxes deduction on Schedule A of Form 1040


Last edited by Wnhough : 07-31-2011 at 06:11 AM.


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Old 07-31-2011, 07:48 AM
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K-1 line 11 code A & B

Thanks Wnhough. I guess the bottom-line question... will I have to pay tax on the money I received from the estate?

I appreciate your time.



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Old 07-31-2011, 08:36 AM
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“ I guess the bottom-line question... will I have to pay tax on the money I received from the estate?”--->In general, No UNLESS the amount of inheritance is $ 1million;inheritances passed down in 21 states and Washington D.C. are subject to estate or inheritance taxes in 2011. Those taxes typically are levied on estates worth $1 million or more and carry a top rate of 16 percent. For example,in Oregon, the inheritance tax applies when a decedent's estate has a taxable value of over $1,000,000. inheritance tax varies from state to state; Some states do collect an inheritance tax. You need to check the laws of your state to determine whether you must pay an inheritance tax.I guess most of US states do not impose inheritance tax. Inheritance tax is tax you pay on property or money that you receive when someone dies. The amount you pay, if anything, will depend on how much you receive and whether you were related to the deceased person, and how closely you were related. Basically, it is a tax on your right to receive an inheritance. An inheritance is not considered income for individual income tax purposes. You can contact Dept of revenue of your state to check if the state imposes inheritance tax.In your particular case, you do not have to pay tax on your return as you have tax deductible items i.e, $66,000, STCL carryover and 3500 under code A (excess deductions).


Last edited by Wnhough : 07-31-2011 at 08:49 AM.


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Old 07-31-2011, 12:31 PM
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It would appear that all the advice I've received is correct. Thanks for verifying and taking the time to explain. Enjoy the rest of you summer.



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